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Resurgence of Pakistan’s Multi-Billion Dollar Tourism Industry

8 min read

Pakistan’s tourism industry has always had limitless untapped potential, but the greater part of the last decade was spent recognizing this potential. In 2019, 5.9% of the country’s GDP was attributed to tourism, which helped in the creation of nearly 4 million jobs. Within the first quarter of 2020, the year tourism was poised to break all previous records, the world was struck by a pandemic. But what happened from there on, and how did the local tourism industry make a comeback within the same year?

Tourism Industry’s Pre-COVID Potential

At the end of 2019, Conde Nast Traveller announced Pakistan as their number one travel destination for 2020. Shortly after, the British Backpackers Society proclaimed the country to be the world’s third highest potential adventure destination for the following year. Apart from this, the industry had been experiencing and projecting unprecedented year on year growth.

Pakistan Travel & Tourism 2019 key data points

Source: World Travel and Tourism Council

According to World Travel and Tourism Council, nearly 6.2% of all the jobs within the country could be traced back to the travel and tourism sector. It created millions of jobs already, and was projected to create millions more in the following years. Even if one used a wider lens and looked at global trends, tourism was consistently outperforming global economic growth.

Source: World Travel and Tourism Council

Growing international interest in Pakistan was apparent for a long time, with foreign tourists tripling in number between 2013 and 2016. To attract more international tourists, the government ended the No Objection Certificate (NOC) requirement for foreigners so they can move freely around the country. They also announced a Visa on Arrival policy for 48 countries while an e-Visa facility was introduced for 175 Countries. Viewing the opportunity in the sector, the Pakistan Government and international bodies like the World Bank also got involved. The World Bank in collaboration with the KP Government launched a program worth USD 70.0mn in June 2019, and a similar program worth USD 55.0mn for the Punjab Government.

Legislative efforts and government interventions coupled with media coverage from notable visitors and foreign travelers had put Pakistan on the global radar. The tourism sector was gaining momentum, but it all came to a halt when COVID-19 began sweeping the world.

Impact of COVID on Industry Stakeholders

When murmurs of the virus first began, nobody foresaw the kind of impact it would have on the global economy. Gradually countries across the world began enforcing nationwide lockdowns, making amendments to their travel policies, and wondering how they would work through the kind of damage that they had already sustained. According to the United Nations World Tourism Organization, latest data indicates that the year 2020 will end with an overall decline of 70-75% in tourist arrivals. The resultant economic loss could amount to up to USD 935 bullion in tourism exports.

International tourist arrivals, 2020 (millions)
COVID-19 has forced international travel to decline by up to 75% in 2020Source: United Nations World Tourism Organization

It did not come as a surprise when the OECD Economic Outlook of March 2020 reported that the SMEs operating in travel and tourism were the worst affected by the virus. This resulted in employee lay-offs, business closures, and question marks against all future plans for even the biggest players in the market. Pakistan’s Civil Aviation Authority (CAA) had reported losses of around $18 million in March 2020 and the initial assessment feared that KP’s tourism sector alone would face a loss of $20 million in revenues and could slash around 260,000 formal jobs. Keeping in mind the sheer volume of informal employment in this sector, this number, big as it was, did not accurately reflect the actual potential damage. As per FindMyAdventure’s own industry projections, the travel operators working in the tourism sector in Pakistan expected tens of billions of dollars in revenue in 2020. Although the Post-COVID revenue trends experienced brief spikes later in the year, the period of complete dormancy from March to July took its toll on hospitality businesses and service providers across the country.

In order to combat this and mitigate any further losses, companies began revisiting their products and making sure they cater to this new market and its changing preferences. Greater attention was being paid to the safety of travellers, new services were being introduced and each day you would see startups pivot and move on to alternative business models. However, August came and brought with it the unexpected resurgence of tourism.

How FindMyAdventure Adapted to the New Normal

As a travel startup, the process of navigating through a global pandemic was difficult to say the least. It continues to be so. But in trying to understand our customers’ changing needs, and facilitating smaller stakeholders in the industry who were struggling, we planned and executed initiatives and products which weren’t even in the pipeline. These included the Guide Fund, which raised PKR 4 million for daily wage workers in the tourism industry, revising vendor regulations which enforced SOPs and guidelines on service providers, and introducing digital experiences and offline activities in the form of Home Adventures in the Pakistani market.

Despite independent vendors and operators resuming operations based on demands as early as June, we chose to wait until an official statement from the government was made. The kind of trust that we were able to instill within customers with this decision, is what caused us to experience a 3x customer uptake when travel re-opened after the lockdown.


Pakistani Tourism Bounces Back

When domestic tourism resumed following the nationwide lockdown, the government initiatives that had been put on halt were being revisited again. The department of Tourism, Culture, Sports and Archaeology in Khyber Pakhtunkhwa had initiated projects worth PKR.17 billion for the promotion of tourism during 2020. The Balochistan government launched seven projects to promote tourism in coastal areas of the province. Apart from this, other initiatives were also launched with the involvement of National Tourism Coordination Board (NTCB) and PTDC Pakistan Tourism Development Corporation (PTDC) among others.

With all these new projects in place, and new ones in the works, positive trends were apparent within the sector. As per WTTC’s previous reports, one in four new jobs were created by the travel and tourism sector over the last five years, and one in ten jobs across the world were attributed to this sector. This is indicative of the kind of potential that this sector has in stabilizing the economy.

With the help of a funding organization, FindMyAdventure has also initiated a project to identify, train and onboard local experience and service providers within the travel and tourism industry. With thousands of potential revenue streams in sight, this initiative alone could empower countless people and ultimately provide customers with more authentic experiences, and a window into the culture of Pakistan. Our outreach programs are already in place, and are helping us find new guides and experience providers every day.

FindMyAdventure: From Trips to Trips, Stays, Rentals and Experiences

Cut back to 2016, when FindMyAdventure first entered the market, looking to build a modern day platform for the modern day traveler. Today, our mission remains the same. Digital resources have allowed consumers to become aware of all the options in the market, and make informed decisions regarding their purchases. By aggregating tour companies and travel agents from across Pakistan onto one platform, it is easier than ever to plan your trip. Over the years the platform grew, brought more vendors on board, grew its range of services, and today, we are ready to play our role in the complete digitization of Pakistan’s travel industry.

In doing so, we introduced new verticals such as luxury travel, car rentals and home adventures. We also revised our product segmentation, which now includes:

Trips: Convenient customized trips and tour packages
Stays: Comfortable stays and accommodation options
Rentals: Reliable cars for local and inter-city travel
Experiences: Activities and experiences all across Pakistan

The growing needs of the market, and the increased digital penetration across the country pushed us to go from having a marketplace for trips and tours, to now collating a fragmented market through our in-destination full stack tourism marketplace.

The Future of Pakistani Tourism

Even though nothing can be said for certain, as soon as 2021 began, the world has its sights set on the tourism sector. The United Nations World Travel Organization (UNWTO) suggested that tourism might revive the global economy after the coronavirus. Pakistan is no exception to this, with efforts being made and stunted projects being resumed.

That being said, if we were to talk about travelers, they have become more aware than ever before. Safety is a priority point that even the smallest service providers have been forced to consider. Policies pertaining to the safety of travelers need to be enforced and revised on a daily basis to ensure that lack of regulations does not serve as a deterrent for domestic tourists. This also means that customers within the industry will be inclined to make more informed choices, and with the advent of digital platforms, information has become as accessible as can be. We just need to make sure that the information being offered is accurate, relevant, and presented in a manner that is convenient for people to understand, even those with very limited technical knowledge.

Pakistani officials anticipate 2021 as a year of economic growth and predict a partial recovery in international tourism in the country as early as the second half of 2021. What people had written off as a doomed year for travel, ended up being the year of lessons. Amidst all the dread and hardship, we remain optimistic for the future of Pakistani tourism and aim to create 100,000+ jobs by 2022 through ongoing efforts and future initiatives.

Mahrukh Mohsin

Mahrukh Mohsin is Content and Communications Manager at FindMyAdventure. Her areas of interest include travel, entrepreneurship and design thinking. A firm believer in the power of empathic design, she also works with startups to help them build products that work, brand strategies that sell and pitches that raise investment.

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